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Building materials manufacturer Bawan inked a sale and purchase agreement (SPA) with Petronash Global to acquire Petronash Holding’s full stake, with the agreement valuing Petronash at USD 175 mn, according to a disclosure to Tadawul. The move comes on the heels of the binding MoU inked by the pair in September. The SPA was initially set to be signed in late September, but had its date pushed forward due to procedural delays.
Terms of the sale: Bawan will initially purchase 80% of Petronash’s shares for USD 80 mn, with a follow-on payment of up to USD 60 mn. Petronash will need to meet three-year financial targets in order to unlock the follow-on payment. Bawan will acquire the remaining balance of Petronash’s shares after the company publishes its 2027 and 2028 financials for an amount that will be determined through an “agreed valuation method and specified mechanism,” reads the disclosure. Petronash reported SAR 69 mn in net income and SAR 699 revenues in 9M 2024, according to unaudited earnings cited in the disclosure.
How will Bawan foot the bill? The company will leverage its internal freecash flows as well as bank facilities to finance the transaction.
Petronash’s post-acquisition leadership structure: Petronash’s founder will remain as company chairman for three years following the signing of the SPA, alongside his senior executive management team, according to the previously signed MoU.
About Petronash: Established in 2000 in the UAE, the company specializes in manufacturing engineered packaged solutions for players in the oil and gas sector, boasting a total manufacturing area of 120k sqm spread across factories in the Kingdom, the UAE, Qatar, and India. Petronash’s main market is in the GCC, but it also exports its products to Africa, the Far East, and the Americas.
ADVISORS- Bawan tapped PwC as its financial advisor on the transaction, with Khoshaim and Associates providing legal counsel and Rystad Energy acting as commercial advisor. Meanwhile Freshfields Bruckhaus Deringer and Piper Sandler are advising Petronash on the transaction.
